Sterling Retreats from Three-Month High Amid US Dollar Recovery

The British pound retreated from its three-month high against the US dollar on Tuesday, falling by around 0.15% to $1.3531. This decline came as investors engaged in correction and profit-taking, alongside the US currency's attempt to recover from recent lows.

Safe-haven demand for the US dollar increased due to concerns over a renewed military confrontation between the United States and Iran, particularly following the expiration of a 60-day temporary ceasefire agreement brokered by Pakistan. The US Dollar Index rose around 0.1% on Tuesday as it tried to rebound from an 11-week low.

Investors are awaiting important UK labor market data later today, including July claimant count figures and the unemployment rate for June. These figures will provide strong clues about the likelihood of the Bank of England raising interest rates in September. According to global interest rate futures markets, the probability of a rate hike is currently priced at around 60%.